Stock Market News

Broker tips: Smith & Nephew, BSkyB, ASOS, Supermarkets

Analysts at Credit Suisse said on Thursday that there is a "potential bidding war on the horizon" for medical devices group Smith & Nephew as US peer Medtronic became the latest company rumoured to be interested in the UK group.

Satellite broadcaster BSkyB may rein back spending on English Premier League football TV rights as it focuses on European expansion, according to broker Bernstein.

Bernstein said it was upgrading BSkyB to 'market-perform' from 'under-perform' and increasing its target price to £8.50 from £7, which the broker said reflected a prudent valuation in line with historic averages.

Analysts at Oriel Securities said they expect to cut their forecasts for ASOS significantly after a profit warning from the online fashion retailer.

Speaking in a note before the open, Oriel said: "The shares will get hurt [...]. They have fallen a long way but the quantum of the warning will mean serious pain this morning. The read across to other online retailers will be poor, but we fear that there may be something ASOS-specific going on here."

Broker Nomura has scrutinised recent retail data on the UK supermarkets and concluded that the slowdown was suffered by all of the Big Four grocers and that a bounce is likely later this year, with Morrison and Tesco set to benefit most.

"Looking at the UK Big Four altogether highlights for us that the slowdown the individual operators have suffered in recent months is actually generic, as inflation has come down, which is itself largely a function of the 'price investment' going in now we think," the broker said. It believes that a price 'spiral' can be avoided and that the Big Four will see improving like-for-like sales trends.

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